Oregon Employment Law Update – June 2018

Statewide Transit Tax and Employer Requirements

The 2018 legislative session amended portions of the Statewide Transit Tax (OR H.B. 2017, enacted in 2017). Subsequent to these amendments, on July 1, 2018 employers must begin withholding the transit tax (one-tenth of 1 percent or .001) from both: ​

The wages of Oregon residents (regardless of where the work is performed); and

The wages of nonresidents who perform services in Oregon.

The tax is calculated based on employee wages and does not apply to independent contractors or self-employment income. An employee who is not subject to regular income tax withholding due to high exemptions, wages below the threshold for income tax withholding, or other factors is still subject to the statewide transit tax withholding.

This tax is not related to the Lane or TriMet transit payroll taxes and employers are responsible for withholding, reporting, and remitting the statewide transit tax. Revenue from the transit tax will help to expand public transportation throughout Oregon.